Development charges might be adding 8-16% to home prices, CMHC data shows
Global News
The development charges can vary greatly from city to city, the Canada Mortgage and Housing Corporation report found.
There might be a hidden driver behind the high cost of homes in Canada: development charges.
Development charges are used by municipalities to help pay for growth.
Companies building houses, subdivisions, shopping centres, industrial parks and other projects pay development charges to help fund municipal infrastructure like new water systems, roads, community centres, parks and emergency services.
These charges might be raising the cost of homes — depending on city and property type — by eight to 16 per cent, new analysis from the Canada Mortgage and Housing Corporation CMHC) released on Thursday suggests.
A report authored by CMHC chief economist Mathieu Laberge pulls development charge data from 30 municipalities in Ontario, British Columbia, Alberta and Quebec.
“New data collected by CMHC shows development charges account for a significant part of the cost of a new housing unit in some cities. Charges vary greatly across the country both in their magnitude and on how they are charged,” Laberge said in the report.
Development charges on a two-bedroom apartment can vary from about $39,600 per unit in Ottawa to $121,500 in Markham, Ont.
This represents an addition of between 8.2 per cent and 15.7 per cent to the average new condo price, the report found.
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